1309.608
Application of proceeds of collection or enforcement - liability for deficiency and right to surplus - UCC 9-608.

(A)
If a security interest or agricultural
lien secures payment or performance of an obligation, the following rules
apply:

(1)
A secured party shall apply or pay
over for application the cash proceeds of collection or enforcement under
section 1309.607 of the Revised Code in
the following order:

(a)
The reasonable
expenses of collection and enforcement and, to the extent provided for by
agreement and not prohibited by law, reasonable attorney's fees and legal
expenses incurred by the secured party;

(b)
The satisfaction of obligations secured
by the security interest or agricultural lien under which the collection or
enforcement is made; and

(c)
The
satisfaction of obligations secured by any subordinate security interest in or
other lien on the collateral subject to the security interest or agricultural
lien under which the collection or enforcement is made if the secured party
receives an authenticated demand for proceeds before distribution of the
proceeds is completed.

(2)
If requested by a secured party, a holder
of a subordinate security interest or other lien shall furnish reasonable proof
of the interest or lien within a reasonable time. Unless the holder complies,
the secured party is not required to comply with the holder's demand made under
division (A)(1)(c) of this section.

(3)
A secured party is not required to apply
or pay over for application noncash proceeds of collection and enforcement
under section
1309.607 of the Revised Code
unless the failure to do so would be commercially unreasonable. A secured party
who applies or pays over for application noncash proceeds shall do so in a
commercially reasonable manner.

(4)
A secured party shall account to and pay
a debtor for any surplus, and the obligor is liable for any deficiency.

(B)
If the underlying
transaction is a sale of accounts, chattel paper, payment intangibles, or
promissory notes, the debtor is not entitled to any surplus, and the obligor is
not liable for any deficiency.